DAKAR, Senegal
An American-based aid group said that at least $900,000 was stolen from it’s Congo programs by members of the organization who conspired with outsiders.
GiveDirectly said that it
learned that people on its Congo team worked with people outside the
organization to defraud the cash transfer program, diverting aid from more than
1,700 impoverished families over six months, starting in August 2022.
“This fraud was only possible
because of a specific change we made in our payment process in order to work in
this remote, insecure region of (Congo),” according to the statement from
Monday. “We feel deep regret for not catching this sooner and take seriously
the vulnerabilities it exposed,” it said.
GiveDirectly said that an
investigation is ongoing and that it was able to recover “a very small portion
of the lost funds,” but the majority of the $900,000 will likely be
“uncoverable.” But the group is working to ensure that families impacted by the
fraud get their money.
More than 1% of money
delivered last year was lost to fraud, the highest amount to date, GiveDirectly
said.
Eastern Congo, where the group
operates, has experienced conflict for decades. About 120 armed groups are
fighting in the region mostly for land and control of mines with valuable minerals,
while some groups are trying to protect their communities. More than 5.5
million people are displaced in Congo, and more than 26 million are facing
hunger, according to the United Nations.
The decades-long crisis and
widespread poverty have fueled an environment ripe
for corruption among aid organizations, analysts say.
“It is unsurprising that the
development sector is a target for corruption given its prominent role in the
country’s economy. Billions of development dollars flow into (Congo) every year
and it is likely that a sizeable portion of this is lost to corruption,”
Benjamin Hunter, Africa analyst for risk assessment firm Verisk Maplecroft,
said Tuesday.
GiveDirectly delivers cash
transfers globally, delivering more than $650 million to people in roughly a
dozen countries, the majority in Africa. It provides aid through mobile money, a
technology to send and receive funds using a SIM card, which it says avoids
many forms of fraud. Once the money’s deposited, people can withdraw the cash
at a mobile money station.
While the group normally
registers people with an independent money agent, gives them SIM cards and
deposits funds on it, due to the insecurity in eastern Congo’s South Kivu
province, where it was operating, GiveDirectly said it made an exception to
it’s normal procedures.
Instead of people registering
with independent mobile agents, which often meant making them travel long
distances, the group used its own enrollment team.
“We now know that while
enrolling villages in South Kivu, some staff conspired to register payment SIMs
to the recipients’ names (per the special exception granted), pocket those
registered SIMs, and put different SIMs in recipients’ phones,” the
organization said. GiveDirect sent cash transfers to the registered SIM cards,
many of which had been stolen by the staff, who with outside help from money
agents and former employees, diverted funds intended for people in need, it
said.
Give Directly said that the
case was concerning for three reasons:
1. “the scale of the fraud, at
the expense of people in extreme poverty
2. “the number of our own team
members who participated
3. “the failure of our systems
to prevent it.”
The group said it has no
reason to suspect this fraud extends beyond its eastern Congo programs.
However, an investigation by
The New Humanitarian, which broke the story, said that another of the
organization’s programs was being audited in one of its sub-Saharan Africa
operations. The Associated Press couldn’t independently verify the allegation
and GiveDirectly didn’t immediately respond to a request for comment.
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